Dual Licensing in Open Source Software Markets

19 Pages Posted: 13 May 2007 Last revised: 14 May 2014

See all articles by Fabio M. Manenti

Fabio M. Manenti

University of Padua - Department of Economics and Management

Stefano Comino

University of Trento - Department of Economics and Management

Date Written: January 1, 2010

Abstract

In this paper we present a theoretical model to study the characteristics and the commercial sustainability of dual licensing, an open source (OS) business strategy that has gained popularity among software vendors. With dual licensing, a firm releases the same software product under both a traditional proprietary license and an open source one. We show that the decision to employ a dual licensing strategy occurs whenever the feedbacks of the open source community are valuable enough compared to the quality of the software that the firm is able to develop in-house. Our analysis points to the central role of an appropriate managing of OS licenses in order to balance the pros and cons of "going open source'' and to make this versioning strategy viable for software vendors; our analysis also suggests a possible explanation for the observed proliferation of open source licenses.

Keywords: open source software, open source business models, embedded software, dual licensing, versioning, license proliferation

JEL Classification: L11, L17, L86, D45

Suggested Citation

Manenti, Fabio M. and Comino, Stefano, Dual Licensing in Open Source Software Markets (January 1, 2010). Available at SSRN: https://ssrn.com/abstract=985529 or http://dx.doi.org/10.2139/ssrn.985529

Fabio M. Manenti (Contact Author)

University of Padua - Department of Economics and Management ( email )

via Del Santo 33
Padova, 35123
Italy

Stefano Comino

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

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